USD Advance Continues; JPY Still Outpacing Dollar

By IBT Staff Reporter On 09/29/09 AT 9:00 AM

The USD has continued its advance from last Friday and currently trades near the 1.4620 level against the EUR, and near the 1.5900 mark versus the British Pound. The only currency to gain against the greenback so far has been the Japanese Yen, which saw an 8-month low of 88.22 at the start of this week's trading. The USD/JPY is currently trading just below the 90.0 price level.

Rising optimism in the American economy was fueled by the recent rise in futures on the stock market, which highlights the growing tendency to buy American in times of crisis. The only currency, as mentioned earlier, which has outpaced the Dollar has been the JPY. Statements made by Japanese Finance Minister Fujii have many traders wondering if Japan will follow through on its promise not to intervene in its currency's recent appreciation. If it chooses not to, the target for the USD/JPY may be close to 82.00 in the coming weeks, according to a number of analysts.

The most important event to watch today, however, will be the Conference Board's (CB) release of their Consumer Confidence report at 14:00 GMT. As the trend is currently pointing towards rising optimism in the US, there is the potential for a bearish USD session following such positive news. Risk appetite has been on the flutter, and a boost of this kind, coupled with the confidence in Europe associated with Angela Merkel's recent victory in Germany, could return investors to the riskier currencies such as the EUR, and even the Pacific and Scandinavian currencies.